It was the highest level since March 2007, and the third highest level since the index launched in 2005.
"A solid third quarter is taking shape here, for small businesses and for the U.S. economy,'' Phelan said. The index is correlated with U.S. gross domestic product growth two to five months ahead. "I think they are seeing demand right now. ... This has got to be showing some strength in orders.''
The rise in borrowing is also good news for jobs, Phelan said, citing a historically strong correlation between loan growth and job creation.
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A separate index released by PayNet showed loan delinquencies ticked up from the prior month, with delinquencies of 31 to 180 days, PayNet's broadest measure of late loan payments, at 1.55 percent of all loans made, compared with 1.53 percent in June.
The index hit a high of 4.73 percent in August 2009. The record low was 1.44 percent last October.